Assortment Planning and Management

This Fortune 50 retailer has over $70 billion in revenue and more than 400 product categories, available through over 2,000 stores and digital channels. Deciding exactly what products to sell in what stores in what time frames is a challenging task for its large team of merchants and planners. Their previous process was Excel- and legacy application-based and thus extremely labor-intensive, time-consuming and error-prone. While the retailer experienced substantial gross margin improvements whenever it re-planned a category, its primitive tools and resource constraints allowed it to re-plan each category only every two to three years. They needed a robust, more flexible, faster, and better application to facilitate ongoing assortment planning and management decision-making.

The application offers the retailer’s planners and merchants a superior and intelligent user experience and has significantly reduced the cycle time required for category product line reviews. It has also given the users new capabilities to spend less time analyzing past history and more time in forward-looking activities, modeling future assortment options to create ideal, margin-maximizing assortments by store cluster and demographics.

Merchants and planners now complete a new plan in one day instead of several weeks. The solution runs on the Amazon cloud, processing 3 terabytes of data on daily, weekly and monthly cycles. They assess the impact of assortment changes in real time at virtually anytime. Wait times for updates in the application have dropped from minutes in the prior application to seconds in the LogicBlox-based application. Merchants make “space aware” decisions that factor shelf space constraints into assortment decisions. The retailer is seeing extremely significant profit margin improvement from faster product line reviews and optimized assortments. The application has also laid a foundation that will enable additional functionality going forward, for example, addressing additional predictive decision support needs and business process improvements.